Sri Lanka PM wants equity swap for USD8 bln debt to China

Sri Lanka's Premier warmly welcomed by Chinese President

Apr 11, 2016 (LBO) – Sri Lanka’s Prime Minister Ranil Wickremesinghe has asked China to swap part of the 8 billion dollars it owes the nation into equity in infrastructure projects, and has offered to sell stakes in Sri Lankan companies.

Wickremesinghe spoke to reporters in Beijing, China on Saturday, media report said.

“We’ve been talking with some companies and also the government of China about the possibility of some infrastructure projects becoming public-private partnerships, in which part of the debt will become equity held by the Chinese companies,” he said.

International trade minister Malik Samarawickrama said Sri Lanka would also like additional funds from China, though they had not asked for a specific amount.

“We want to reduce the current debt by inviting Chinese companies, Chinese investors, to look at some of the enterprises in Sri Lanka, the state-owned enterprises, with a view to taking at least part of that equity over,” he said.

“Then we can reduce the current debt that we have and open up the opportunity for us to take more funds from Chinese banks.”

State-owned China Communications Construction Company (CCCC) sought compensation from the government for around 125 million dollars for delays in starting a 1.4 billion dollar Colombo Port City project last year, after the government called for a review.

“The company has asked for additional compensation in view of the fact they say there has been a delay,” Wickremesinghe said. “But I think we can talk and settle it.”

Prime Minister said Port City is not going to be a Sri Lanka- China venture. “It’s an opportunity for everyone to make money. That’s what we do in Asia.”

He said in addition to China and Sri Lanka, Singaporeans and many Indians have also shown interest.

“Already some of the Indian businesses have told me they are interested in coming in to port city. It will be a joint venture, there will be the Chinese companies and Sri Lankan companies, and we want to put 40 percent out into the Stock market because we intend to give Indian companies the opportunity to invest in this Sri Lankan venture,” Wickremesinghe said.

“I will be going to India, Bangladesh, Middle East, East Africa, South East Asia and ask everyone to join in including Japan and China. We want to make this an Asian area. Where Asians can deal in the Indian Ocean and even go to the European Union.”